Minimum wage bill faces tweaks in the Senate

Democrats will need to heed some Republican wishes to win approval

By

ElizabethDavidz

WASHINGTON (MarketWatch) -- The Democrat-sponsored increase in the nation's minimum wage level passed easily in the House of Representatives Wednesday without any Republican add-ons. But in the Senate, Democrats with a much slimmer majority are likely to accommodate Republicans by adding small-business incentives to get the measure passed.

The House bill, which passed 315 to 116, would raise the minimum wage over two years to $7.25 from $5.15 an hour. See full story. The legislation is a stand-alone wage increase and doesn't include tax breaks for small businesses. Many Republicans say the breaks are necessary to help businesses offset the cost of the wage increase.

"A wage increase is long overdue and it doesn't need to be delayed and it shouldn't be conditional on other policy changes," said Tom Kiley, spokesman for Rep. George Miller, D-Calif., chairman of the House Committee on Education and Labor.

In the Senate though, Democratic leaders, with a slim 51-49 majority, are working with key Republicans to get the 60 votes needed to prevent a filibuster and advance the legislation in that chamber. This includes adding the tax incentives.

In fact, Sen. Max Baucus, D-Mont., chairman of the Senate Finance committee, said Wednesday that they expect to create a tax-break package for small businesses even if it doesn't include a minimum wage increase. He said, though, the tax-break measure and wage hike likely will be in the same package.

Even Republicans who don't favor a minimum wage are willing to compromise. Iowa Sen. Chuck Grassley, the top Republican on the Senate Finance Committee, said during a committee hearing Wednesday that although he doesn't see the need to raise the minimum wage, he knows it has popular support.

"It's one of the most important things out there," Grassley said.

The Senate could begin debate on the minimum wage legislation as early as next week.

Along with the Senate Finance Committee, the Senate labor committee also has started to discuss the issue.

Sen. Michael B. Enzi of Wyoming, the committee's ranking Republican, said he'd be happy to work with Democrats on a minimum wage hike.

"They're being cooperative; we're being cooperative," Enzi said.

He said he didn't want to be specific about the terms of any legislation while negotiations are underway.

Tax breaks, other help eyed for small businesses

Although senators won't outline what a minimum wage bill may finally look like, House Republicans unveiled legislation Tuesday that they hope could shape the debate in the Senate and any negotiations to resolve differences between the two chambers' versions of the legislation.

House Republicans Reps. Howard P. "Buck" McKeon of California and Jim McCreary of Louisiana presented a bill that would package the same minimum wage increase passed in the House with tax breaks for small businesses and a proposal that would help small businesses to offer health insurance to their employees.

McKeon said they introduced the bill to show Democrats what they would have offered if they had had a chance to add amendments to the wage hike bill.

"We have a better plan, a better thing to offer," McKeon said.

The legislation also would shorten restaurant depreciation schedules on new construction from 29 to 15 years, extend through 2010 a provision that allows small businesses to deduct up to $100,000 of investments in depreciable assets and eliminate the 0.2% federal unemployment surtax.

Supporters of a clean minimum-wage bill without any incentives say that small businesses have been getting breaks, while minimum wage workers have been falling behind.

Jared Bernstein, a senior economist for the Economic Policy Institute, a think tank that studies conditions of low- and middle-income families, said it's about time the minimum wage was increased. This is the longest period on record that the minimum wage hasn't been increased since it was introduced 1938.

"Businesses small and large have already seen literally 100 of billions of tax cuts targeted their way and this over a period when the minimum wage was falling in real terms," Bernstein said.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.